Acadia Pharmaceuticals (ACAD -2.66%), a mid-cap biotech company that focuses on neuroscience therapies, saw its shares rise 10.6% on Wednesday. The stock has been volatile, with a 52-week low of $15.68 and a 52-week high of $55.90, and is down more than 55% for the year.
It was a classic bounce back, as a reaction to a possible overreaction. The stock lost nearly $5 on Tuesday, dropping from its high of $25.29 and going for as low as $20.84. The catalyst for the fall was the concern investors had over the decision Acadia announced after the market closed on Monday. It plans to resubmit its supplemental New Drug Application (sNDA) for Nuplazid (pimavanserin), as a treatment for hallucinations and delusions associated with dementia. The company said it planned the resubmission, based on clinical data, for the first quarter of next year.
The company said the resubmission is intended to show that Nuplazid provides a clinically meaningful benefit to dementia patients, without damaging cognition or motor function.
The therapy is already approved to treat hallucinations and delusions connected with Parkinson's disease psychosis. But in April, Acadia received a Complete Response Letter from the Food and Drug Administration declining Nuplazid's use for dementia, noting problems with the studies for the drug in dementia patients, including a lack of statistical significance in some of the subgroups of patients in the study and too few patients with less-common dementia subtypes in the study.
While Nuplazid is the company's only marketed drug, it does have several other therapies in its pipeline, including trofinetide for Rett syndrome. The biotech company has already completed a phase 3 trial for trofinetide and says it plans to submit a New Drug Application in mid-2022. Acadia also has a two early-stage therapies, ACP-044, a non-opioid analgesic, and ACP-319, a drug designed to improve cognitive function and alleviate other neuropsychiatric symptoms associated with various central nervous system disorders. The company also is looking to expand Nuplazid's label as an anti-hallucination drug for schizophrenia patients.
Looking at the company's financials, it's clear that it needs to expand Nuplazid's label or hope that trofinetide is approved. The company did report $131.6 million in revenue in the third quarter, all from Nuplazid, and up 9% year over year. The company has significantly tightened its belt, but it is still losing money. It reported a net loss of $14.5 million in the quarter, compared to a loss of $84.7 million in the same period last year. The company has time to become profitable, however, with enough cash ($540 million) to last more than eight years at the current burn rate.